Question

Cindy Braun created a corporation providing legal services, Cindy Braun Inc., on July 1, 2014. On July 31 the balance sheet showed Cash $4,000; Accounts Receivable $2,500; Supplies $500; Equipment $5,000; Accounts Payable $4,200; Common Stock $6,200; and Retained Earnings $1,600. During August, the following transactions occurred.Aug. 1. Collected $1,100 of accounts receivable due from customers.4. Paid $2,700 cash for accounts payable due.9. Performed services worth $5,400, of which $3,600 is collected in cash and the balance is due in September.15. Purchased additional offce equipment for $4,000, paying $700 in cash and the balance on account.19. Paid salaries $1,400, rent for August $700, and advertising expenses $350.23. Paid a cash dividend of $700.26. Borrowed $5,000 from Standard Federal Bank; the money was borrowed on a 4-month note payable.31. Incurred utility expenses for the month on account $380.

Instructions(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column heading should be Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings + Revenues - Expenses - Dividends. Include margin explanations for any changes in Retained Earnings.(b) Prepare an income statement for August, a retained earnings statement for August, and a classified balance sheet at August 31.